COSATU denounces in the strongest possible terms the illogical hysteria on the National Credit Amendment (NCA) Act by the Banking Association of South Africa (BASA).
It is unfortunate but not surprising that BASA has chosen to take the low road and misrepresent the progressive pro-poor provisions of the NCA Act. It is clear that BASA’s sole loyalty is to the banking and lending industry’s morally unjustifiable and financially unsustainable levels of profits. Evidently, the billions of Rands that are squeezed from the meagre wages of workers are not enough for these modern-day Scrooges. They must clearly believe we are in the era of Charles Dickens.
This bleating comes from the same self-righteous crew who pay CEOs of banks packages of more than R30 million per annum, whilst at the same time retrenching 1000s of bank tellers, cleaners, security guards who are lucky to be earning R10 000 per month and many in fact earning the minimum wage only.
BASA’s rantings are simply devoid of any logic or truth. The NCA Act provides for the unemployed and those earning less than R7,500 per month the following possible interventions:
• Restructuring their debt repayment schedule over 5 years or if not possible then too;
• Suspend credit payments for 12 to 24 months with regular reviews;
• Extinguish the debt or a percentage of the debt if after 2 years the consumer is still not able to pay the debt; and
• Empowering magistrates to reduce interests charges to as low as 0%.
Such interventions come with compromises e.g. that those consumers would not be able to access further credit for a set time.
It protects essential bedding, school supplies and kitchen appliances from repossession by the Sheriff.
It criminalises reckless and illegal lending by the mashonisas. If anything, BASA should support the NCA Act as it seeks to close down the mashonisas and guide consumers to seek products from legal lenders.
BASA to date has not been able to explain what is reckless, immoral, unsustainable or unconstitutional about the above provisions. In fact, several of BASA’s members distanced themselves from BASA’s conscience-free submissions to Parliament on the NCA Act. Many of the banks said they already provide such help to the poor, so why would it be a problem to put it in law?
The Reserve Bank’s latest report to Parliament highlights that most workers are over-indebted and battling to survive. The interest rates that banks charge the poor are not only bludgeoning them into the ground but strangling any potential economic growth by fleecing workers of the little disposable income that they have.
What is needed now is for banks to reduce the excessive interest rates they charge the working and middle classes and SMMEs. Freeing up that capital will help drive demand, grow the economy and create jobs.
The Department of Trade and Industry, National Credit Regulator and Consumer Tribunal must move with speed to implement this progressive law, ensure the public and industry are aware of consumer rights and send the mashonisas to prison.
Delaying tactics by BASA are of no value. If the banking and financial sector are really committed to the New Dawn, then let’s see them help the most vulnerable and implement what is now a law of the Republic.
For further information please contact: Matthew Parks
COSATU Parliamentary Coordinator
Cell: 082 785 0687